Contract Management
No Reliable Data to Measure Benefits of the Simplified Acquisition Test Program Gao ID: GAO-03-1068 September 30, 2003In recent years, the federal government has introduced new ways to streamline the acquisition process. One of those vehicles is the simplified acquisition procedures test program, which removes some of the procedural requirements for buying commercial goods and services. Using the test program, federal procurement officials can make purchases faster than they have in the past for procurements not exceeding $5 million. Congress mandated that GAO determine the extent to which federal executive agencies--at a minimum, the Department of Defense (DOD)--have taken advantage of the test program and any benefits realized. One way to measure use is to examine test program data from the Federal Procurement Data System (FPDS). It is the central repository of contracting information. In addition to examining FPDS data, GAO looked at data from DOD's data system.
Because the Federal Procurement Data System contains unreliable data about the simplified acquisition test program, GAO was unable to determine the extent to which federal executive agencies--including DOD--have used the test program and have realized any benefits. Specifically, the database indicated that the Departments of Treasury, Defense, and Justice were the three largest dollar-value users of the test program in fiscal year 2001 (the latest year with complete data available). But GAO found that FPDS either overstated or understated use of the test program by millions of dollars. The table below shows examples of discrepancies at different buying organizations within these three departments. GAO also found data reliability problems with contract data in DOD's own data system--the Defense Contract Action Data System (DCADS)--which feeds into FPDS on an ongoing basis. For example, for fiscal year 2002, DCADS showed about $146 million in test program contract actions for two buying organizations for the Naval Air Systems Command and the Defense Intelligence Agency. After reviewing contract actions that had the highest dollar value, procurement officials at these two DOD buying organizations said that none of the entries were awarded through the test program. There were also reliability problems at other buying commands. The federal buying organizations we visited have not collected any other data that would allow us to assess whether the test program is helping to increase efficiency, improve contract prices, reduce administrative costs, or improve the delivery of goods and services. Anecdotal evidence indicates that the test program is getting favorable reviews. For example, nearly all procurement officials with whom GAO spoke at the buying organizations GAO visited indicated that the program's primary benefit is the ability to process a contract more efficiently.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-03-1068, Contract Management: No Reliable Data to Measure Benefits of the Simplified Acquisition Test Program
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Report to Congressional Committees:
United States General Accounting Office:
GAO:
September 2003:
CONTRACT MANAGEMENT:
No Reliable Data to Measure Benefits of the Simplified Acquisition Test
Program:
Simplified Acquisition Test Procedures:
GAO-03-1068:
GAO Highlights:
Highlights of GAO-03-1068, a report to the Senate and House Committees
on Armed Services
Why GAO Did This Study:
In recent years, the federal government has introduced new ways to
streamline the acquisition process. One of those vehicles is the
simplified acquisition procedures test program, which removes some of
the procedural requirements for buying commercial goods and services.
Using the test program, federal procurement officials can make
purchases faster than they have in the past for procurements not
exceeding $5 million.
Congress mandated that GAO determine the extent to which federal
executive agencies”at a minimum, the Department of Defense (DOD)”have
taken advantage of the test program and any benefits realized. One way
to measure use is to examine test program data from the Federal
Procurement Data System (FPDS). It is the central repository of
contracting information. In addition to examining FPDS data, GAO
looked at data from DOD‘s data system.
What GAO Found:
Because the Federal Procurement Data System contains unreliable data
about the simplified acquisition test program, GAO was unable to
determine the extent to which federal executive agencies”including
DOD” have used the test program and have realized any benefits.
Specifically, the database indicated that the Departments of Treasury,
Defense, and Justice were the three largest dollar-value users of the
test program in fiscal year 2001 (the latest year with complete data
available). But GAO found that FPDS either overstated or understated
use of the test program by millions of dollars. The table below shows
examples of discrepancies at different buying organizations within
these three departments.
Examples of Discrepancies with FPDS‘s Data
[See PDF for image]
[End of table]
GAO also found data reliability problems with contract data in DOD‘s
own data system”the Defense Contract Action Data System (DCADS)”which
feeds into FPDS on an ongoing basis. For example, for fiscal year
2002, DCADS showed about $146 million in test program contract actions
for two buying organizations for the Naval Air Systems Command and the
Defense Intelligence Agency. After reviewing contract actions that had
the highest dollar value, procurement officials at these two DOD
buying organizations said that none of the entries were awarded
through the test program. There were also reliability problems at
other buying commands.
The federal buying organizations we visited have not collected any
other data that would allow us to assess whether the test program is
helping to increase efficiency, improve contract prices, reduce
administrative costs, or improve the delivery of goods and services.
Anecdotal evidence indicates that the test program is getting
favorable reviews. For example, nearly all procurement officials with
whom GAO spoke at the buying organizations GAO visited indicated that
the program‘s primary benefit is the ability to process a contract
more efficiently.
What GAO Recommends:
Before Congress decides whether to make the test program a permanent
contracting vehicle, GAO recommends that DOD and other selected
federal executive agencies ensure that reliable data are available to
make program assessments. DOD agreed with GAO‘s recommendation, while
the other selected federal agencies had no comments on the
recommendation.
www.gao.gov/cgi-bin/getrpt?GAO-03-1068.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact David Cooper at
(202) 512-4125 or cooperd@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
No Reliable Data Available to Assess Test Program:
Conclusion:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: Comments from Department of Justice's Federal Bureau of
Prisons:
Table:
Table 1: Examples of Discrepancies with FPDS's Data:
Abbreviations:
DCADS: Defense Contract Action Data System:
DOD: Department of Defense:
FAR: Federal Acquisition Regulation:
FPDS: Federal Procurement Data System:
GAO: General Accounting Office:
OFPP: Office of Federal Procurement Policy:
United States General Accounting Office:
Washington, DC 20548:
September 30, 2003:
The Honorable John W. Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate:
The Honorable Duncan Hunter
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives:
Acquisition reform has fundamentally changed the way the federal
government procures billions of dollars worth of goods and services
each year. The procurement process is more streamlined than ever
before. Government buyers can make their purchases with less turnaround
time, they have less paperwork, and they can rely on a variety of tools
to help them expedite the process. One tool is the simplified
acquisition procedures test program, which reduces the procedural
requirements for buying commercial goods and services not exceeding $5
million.
Congress mandated that we report on the test program and address the
(1) extent to which federal executive agencies--at a minimum, the
Department of Defense (DOD)--have used the test program, (2) benefits
realized through its use, and (3) impact that the program has had on
contract competition.[Footnote 1]
To satisfy these objectives, we obtained and analyzed test program data
from the Federal Procurement Data System (FPDS) and DOD's Defense
Contract Action Data System (DCADS). We used these data to identify
buying organizations that were among the largest total-dollar-value
users of the test program and to review contract files at selected
buying organizations to determine the accuracy of the data reported. We
interviewed procurement officials to determine whether use of the test
program has resulted in noticeable benefits or affected competition.
Results in Brief:
Because the FPDS and DCADS databases contain unreliable test program
data, we were unable to determine the extent to which federal executive
agencies, including DOD, have taken advantage of the program. Neither
were we able to determine the test program's benefits and impact on
competition.
The federal buying organizations we visited have not collected any
other data that would allow us to assess whether the test program is
helping to increase efficiency, improve contract prices, reduce
administrative costs, or improve the delivery of goods and services.
Two years ago, we reported that data were not being collected to
provide a basis for measuring whether the test program produced the
desired results of maximizing efficiency and economy and minimizing
administrative burden and cost. We recommended that data be collected
to demonstrate the benefits of the test program. In response to our
recommendation, DOD said it planned to convene an integrated process
team to determine ways to measure the benefits of the test program.
However, DOD has not taken action to measure the program's benefits.
This report recommends that DOD and the Office of Federal Procurement
Policy (OFPP) develop evaluation mechanisms for measuring test program
benefits. It also recommends that the Departments of Treasury, Justice,
and Defense improve the reliability of test program data to make
program assessments. DOD partially concurred with the first
recommendation and agreed with the second. The other two federal
executive agencies had no comments on our recommendations.
Background:
To streamline the federal procurement process, Congress in 1994
authorized the use of simplified acquisition procedures for purchases
not exceeding $100,000.[Footnote 2] Simplified procedures allow agency
officials to expedite the evaluation and selection processes and keep
documentation to a minimum.
In 1996, Congress expanded the use of simplified acquisition
procedures[Footnote 3] by authorizing a test program that allows
government buyers to procure commercial items not exceeding $5
million[Footnote 4] in order to maximize efficiency and economy and
minimize burden and administrative costs for both the government and
industry.[Footnote 5] For example, government buyers:
* may issue a combined synopsis and solicitation and may require
proposal submission in fewer than 45 days, as would otherwise be
required;
* need not establish a formal evaluation plan or competitive range,
conduct discussions with vendors, or score quotations or offers; and:
* can minimize the documentation required to justify contract award
decisions.
Under simplified acquisition procedures, the Federal Acquisition
Regulation (FAR) requires competition to the maximum extent
practicable.[Footnote 6]
The test program, which expires on January 1, 2004, is only one of a
number of streamlined contracting vehicles that federal agencies use to
procure goods and services. Other options include purchase cards,
multiple award Federal Supply Schedule contracts, governmentwide
acquisition contracts, and multiple award task and delivery order
contracts. In one way or another, these options allow government buyers
to simplify and expedite the procurement process.
In 2001, to find out whether the test program was achieving desired
results, we evaluated DOD's use of the program for commercial
purchases.[Footnote 7] We reported that data had not been collected to
provide a basis for measuring whether the test program was maximizing
efficiency and economy and minimizing administrative burden and cost.
However, our report summarized a 1999 OFPP survey showing that
procurement executives believed the program improved the federal
procurement process and that the test program should be made permanent.
We asked Congress to consider requiring the OFPP to develop a method
for demonstrating that the test program was producing desired results.
FPDS is the central repository of federal contracting information, and
it contains detailed data on contract actions exceeding $25,000.
Although federal agencies collect contract data using their own data
systems, their data must be transmitted to and consolidated in FPDS on
an ongoing basis. FPDS can assist procurement managers in making such
decisions as understanding the consequences of their purchasing
decisions, projecting future needs, or leveraging overall buying power.
FPDS was designed to provide basic contracting information, such as
whether the simplified acquisition test program was used. FPDS also was
designed to provide insight on small business participation and
competition, among other things. Federal officials can use the data to
perform oversight responsibilities. The General Services
Administration, through the Federal Procurement Data Center, operates
and maintains FPDS. DOD accumulates similar data on contract actions of
over $25,000 in the DCADS database, and, like other federal agencies,
transmits contract information to FPDS.
No Reliable Data Available to Assess Test Program:
We found significant data-reporting errors related to the test program
in both FPDS's and DCADS's databases. Because of unreliable data, we
were unable to determine the extent to which federal executive agencies
have used the simplified acquisition test program and what benefits
they may have realized from its use. We also could not determine the
impact that the test program has had on contract competition.
To verify FPDS's data, we visited the Departments of Treasury, Defense,
and Justice--the three largest dollar-value users of the simplified
acquisition test program in fiscal year 2001, as reported in FPDS.
FPDS's data showed that the Departments of Treasury, Defense, and
Justice had test program contract actions worth about $303 million,
$209 million, and $157 million, respectively, in fiscal year 2001, the
latest year with the most complete data available. We found that these
figures were either overstated or understated by millions of dollars.
For example, as shown in table 1, FPDS's data showed that the
Department of the Treasury's U.S. Mint had about $242 million in test
program contract actions, making it the largest user of the test
program in fiscal year 2001. However, the U.S. Mint officials told us
that they did not use the program at all. We also found reporting
errors with FPDS's data for DOD. An official at one of DOD's buying
commands--the Defense Logistics Agency--said it had about $146 million
in test program contract actions, but FPDS's data showed only $4
million. In the case of the Department of Justice, FPDS's data showed
that the Federal Prison Industries, which is a part of the Federal
Bureau of Prisons, had about $118 million in test program contract
actions. Federal Prison Industries officials told us they used the test
program extensively, but when we asked them to review a portion of
FPDS's data, about $31 million worth of contract actions, they said
that none of the contract actions listed were part of the test program.
Table 1: Examples of Discrepancies with FPDS's Data:
Department's buying organization: Department of the Treasury's U.S.
Mint; Value of test program contracts, according to FPDS (fiscal year
2001): $242 million; What procurement officials said about
FPDS's data: U.S. Mint said it did not use the test program at all.
Department's buying organization: DOD's Defense Logistics Agency; Value
of test program contracts, according to FPDS (fiscal year 2001): $4
million; What procurement officials said about FPDS's data:
Defense Logistics Agency said it obligated $146 million in test program
contracts.
Department's buying organization: Department of Justice's Federal
Prison Industries; Value of test program contracts, according to FPDS
(fiscal year 2001): $118 million; What procurement officials
said about FPDS's data: After reviewing portions of FPDS's data, about
$31 million in contract actions, Federal Prison Industries said none of
those items were purchased under the test program.
Sources: FPDS (data); GAO (analysis).
[End of table]
As with other federal agencies, DOD has its own database system to
collect contract data, and it transmits those data to FPDS on an
ongoing basis. We decided to take a closer look at DOD's database--
DCADS--for fiscal year 2002, the latest year with the most complete
data. As we found with FPDS, there were reporting errors in DCADS.
According to DCADS, DOD had a total of $1.9 billion in test program
contract actions. For verification, we reviewed selected test program
contract actions for DOD's buying organizations that were major dollar-
value users of the test program, according to DCADS. While we did find
that one Air Force buying organization correctly reported its test
program contract actions, other buying commands reported them
incorrectly in DCADS. For example, DCADS's data showed that an
organization within the Naval Air Systems Command had about $122
million in test program contract actions and that the Defense
Intelligence Agency's Virginia Contracting Activity had $24 million. We
asked procurement officials at DOD's buying organizations to review
DCADS's data for contract actions that had the highest dollar value.
They said that none of those listed were awarded under the test
program. Three other DOD buying organizations also had reporting
errors.
In addition to the data reliability problems we found with FPDS's and
DCADS's test program data, we also found that federal buying
organizations had not collected any other data to document whether the
test program is helping to increase efficiency, improve contract
prices, reduce administrative costs, or improve the delivery of goods
and services. However, indications are that the test program is well
received. Nearly all procurement officials with whom we spoke at
selected buying organizations view the test program favorably. They
cite as the program's primary benefit the ability to process a contract
more efficiently, and the majority advocates making the test authority
permanent.
In commenting on our 2001 report, DOD stated its intention to convene
an integrated process team to consider ways for measuring the benefits
of the test program. However, DOD has not acted on this initiative.
In discussing the results of this effort, DOD officials stated that
they are willing to assess the benefits of the test program. Justice
and Treasury Department officials stated that they would work to
improve the reliability of test program's data.
Conclusion:
The simplified acquisition test program, which streamlines the process
for buying commercial items that do not exceed $5 million, expires on
January 1, 2004. Most procurement officials with whom we spoke at
selected buying organizations said that they would like the test
program to be made permanent and that there are benefits associated
with buying commercial items using simplified procedures. However,
anecdotal information is not enough to determine this program's overall
impact and benefits. Inherent in any test program is the expectation
that federal agencies establish evaluation mechanisms for assessing
program results, which includes ensuring that reliable data are
collected and used for the assessments. Our observations are that there
is no reliable information for measuring the test program's benefits.
Recommendations for Executive Action:
Before Congress provides permanent authority for using simplified
procedures to acquire commercial items costing up to $5 million, we
recommend that DOD work with the Administrator of OFPP to develop
evaluation mechanisms for measuring test program benefits. In addition,
the Departments of Treasury, Justice, and Defense should independently
take appropriate actions to ensure that reliable FPDS test program data
are available to make program assessments.
Agency Comments:
We asked OFPP and the Departments of Treasury, Justice, and Defense for
written comments on the draft report. OMB, which oversees OFPP, and DOD
provided oral comments. OMB did not comment on the specifics of the
report but made a general observation that the test program provides a
benefit if used correctly. It said the test program enables agencies to
gain timely access to the marketplace while still reaping the benefits
of open market competition. OMB further noted that the test program may
be especially beneficial as an alternative to the Federal Supply
Schedule and multiple or single award task and delivery order
contracts, when prenegotiated terms and conditions of these vehicles
are not suitable to meet an agency's needs.
DOD partially concurred with our recommendation that it work with OFPP
to develop evaluation mechanisms for measuring test program benefits.
DOD stated that it would develop a methodology to evaluate the benefits
of the test program, on the basis of such metrics as procurement lead-
time, and share the results with OFPP. Using this methodology, the
benefits of the test program would be measured by sampling test program
contracts from the contract reporting system. DOD concurred with our
recommendation that it take appropriate actions to ensure that reliable
FPDS test program data are available to make program assessments. DOD
is planning to issue a memorandum to the military departments and
defense agencies emphasizing the need for all test program data to be
entered into the contract-reporting system accurately, so reliable data
are available to demonstrate the continuing need for this program.
The Department of Justice's Federal Bureau of Prisons concurred with
the information reflected in the report; the bureau's comments appear
in appendix II. The Department of the Treasury's U.S. Mint agreed with
our finding that it did not use the test program.
We are sending copies of this report to other interested congressional
committees and the Secretary of Defense; Secretary of the Air Force;
Secretary of the Army; Secretary of the Navy; Director, Defense
Logistics Agency; Director, Office of Management and Budget;
Administrator, Office of Federal Procurement Policy; Administrator of
General Services; Assistant Attorney General for Administration,
Department of Justice; Secretary of the Treasury; and Director, U.S.
Mint. We will also make copies available to others on request. In
addition, this report will be available at no cost on the GAO Web site
at http://www.gao.gov.
If you have questions about this report, please contact me at (617)
788-0500 or Ralph Dawn at (202) 512-4544. Key contributors to this
assignment were Jeffrey Rose, Ralph Roffo, Marie Ahearn, Lily Chin, and
Julia Kennon.
Sincerely yours,
David E. Cooper
Director, Acquisition and Sourcing Management:
Signed by David E. Cooper:
[End of section]
Appendix I: Scope and Methodology:
Our objectives were to determine the (1) extent to which federal
executive agencies used the simplified acquisition test authority, (2)
benefits they realized through its use, and (3) impact that the program
has had on contract competition. To satisfy these objectives, we
obtained and analyzed test program data from the Federal Procurement
Data System (FPDS) and the Department of Defense's (DOD) Defense
Contract Action Data System (DCADS). Using the data, we identified
buying organizations that were among the largest dollar-value users of
the test program, and we reviewed contract files at selected buying
organizations to determine the accuracy of the data reported. We
interviewed procurement officials from the Office of Federal
Procurement Policy and from the Departments of Treasury, Defense, and
Justice to obtain their views of the benefits from using the test
authority. In addition, we reviewed federal regulations and available
test program guidance.
We initially identified, using FPDS's data, the major dollar-value
users of the test program during fiscal year 2001, the year of the most
recent and complete data we had available at the time of our review.
According to the data, the Departments of Treasury, Defense, and
Justice were the largest dollar-value users of the test program. We
then used the data to identify the buying organizations within each of
these departments that were the largest dollar-value users. We met with
procurement officials at selected buying organizations to verify the
reliability of FPDS's test program data and to discuss the benefits
realized.
We also reviewed the DCADS database to respond to our congressional
mandate's minimum requirements. Using DCADS's complete fiscal year 2002
data, we selected the buying organizations within DOD commands that
were major dollar-value users of the test authority. The selected
organizations were the (1) Air Force Air Mobility Command, (2) Air
Force 21st Contracting Squadron, (3) Army Communications-Electronics
Command, (4) Naval Air Systems Command's Naval Air Warfare Center, (5)
Defense Intelligence Agency's Virginia Contracting Activity and (6)
Defense Logistics Agency's Defense Supply Center Philadelphia. We
discussed with procurement officials at each of these buying
organizations the reliability of DCADS's test program data and the
program benefits realized.
We conducted our work from March through August 2003 in accordance with
generally accepted government auditing standards.
[End of section]
Appendix II: Comments from Department of Justice's Federal Bureau of
Prisons:
U.S. Department of Justice
Federal Bureau of Prisons:
Washington, DC 20534:
September 9, 2003:
Ralph Dawn, Assistant Director Acquisition and Sourcing Management
General Accounting Office Washington, DC 20548:
Dear Mr. Dawn:
The Bureau of Prisons appreciates the opportunity to formally respond
to the General Accounting Office's draft report entitled Contract
Management: No Reliable Data to Measure:
Benefits of the Simplified Acquisition Test Program. We have completed
our review and concur with the information reflected in the report. The
report does not contain any recommendations for the BOP.
Thank you for the opportunity to review the draft copy of this report.
If you have any questions regarding this response, please contact
Jessie Hobbs, External Liaison, at (202) 305-7401.
Sincerely,
Michael W. Garrett:
Senior Deputy Assistant Director:
Signed by Michael W. Garrett:
FOOTNOTES
[1] Our reporting mandate is found in the Bob Stump National Defense
Authorization Act for Fiscal Year 2003, Pub. L. No. 107-314, sec. 812,
Dec. 2, 2002.
[2] Federal Acquisition Streamlining Act of 1994, Pub. L. No. 103-355,
Oct. 13, 1994.
[3] Clinger-Cohen Act of 1996, Pub. L. No. 104-106, Div. D, Feb. 10,
1996 (short title changed from Federal Acquisition Reform Act of 1996
to Clinger-Cohen Act of 1996, Pub. L. No. 104-208, sec. 808, Sept. 30,
1996).
[4] Federal Acquisition Regulation, Subpart 13.5.
[5] Since then, there has been another effort to simplify procurement
in special situations. The Homeland Security Act of 2002 temporarily
expands the use of simplified acquisition procedures (Pub. L. No. 107-
296, sec. 855(b), Nov. 25, 2002). The act authorizes executive agencies
to use simplified procedures in any procurement of property or services
acquired as part of the fight against terrorism and related threats.
[6] FAR sec. 13.104.
[7] U.S. General Accounting Office, Contract Management: Benefits of
Simplified Acquisition Test Procedures Not Clearly Demonstrated,
GAO-01-517 (Washington, D.C.: Apr. 20, 2001).
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